Monday, March 26, 2012

Obamacare undergoes Supreme Court scrutiny tomorrow, and we'll hear in a few weeks/months as to what the Court does. The challenge is whether Congressional ability to regulate interstate commerce allows the government to require people to buy health insurance, paying a penalty if they refuse to do so.

Wading through the mumbo jumbo, I think we ultimately have two choices. One is that except in the most strained and patchworked circumstances, Constitution places almost no restraint on the ability of the federal government to act like a state government in terms of economic regulation. Politics, not courts, restrain the scope of federal government. This is the choice that courts have made since the 1930s.

The other choice is that except in strained and patchworked ways, the Constitution doesn't allow the federal government to operate like a modern integrated nation-state in terms of economic regulation. The government could figure out weird work-arounds involving tax incentives in some cases, but otherwise we'll just have to hope that government is the problem and not the solution, because we're not going to let it operate as a solution.

These are the ultimate choices, and a decision to partially overturn Obamacare doesn't send us all the way to the second choice. It does start us down the road though, with consequences to follow.

The Supreme Court never reviewed this particular challenge though, and Chief Justice Roberts, back when he was a wee appellate judge, signaled his own concern with the ESA. If the Supreme Court changes how we understand the Commerce Clause, things can change for environmental regulation.

A lot is dependent on what the Court decides over Obamacare, and on who gets to make the replacement appointments between now and January 2017.

15 comments:

"The challenge is whether Congressional ability to regulate interstate commerce allows the government to require people to buy health insurance, paying a penalty if they refuse to do so."

The problem with "opting out" is that it's estimated to add $1,000 to the average family's annual health bill, while as good as everyone in the US uses hospitals and clinics at some point but many of the opt-outers simply don't pay. It's difficult to see how fiscal conservatives can justify continued subsidies-in-practise to freeriders, with the 26 AG's case being described by Reagan's solicitor general as "grandstanding in a preposterous way [...] It's simply a ploy and a pathetic one at that."

The Supreme Court case is allegedly a point of principle: that the Federal govt can't force somebody to buy health insurance. I am dubious about this so-called principle: after all, the government can force people to buy auto insurance if they want a driver's license. Republicans say, well that's the state government, not the Fed, but so what.

However dubious the alleged Constitutional principle, it points out a real weakness in Obama's health care "plan". In order to keep the cost of the plan down, the plan forces everybody to buy health insurance. There are a lot of people for whom this is not affordable. Suppose your income is $20-$30K, and health insurance costs you $500/month for the premium. Then you're spending $6K on premiums alone, and with deductibles you may spend $8K total before your health pan starts to pay anything.

If you're young and healthy, you may just refuse to buy the health insurance, and hope you don't get seriously sick. Refusing to buy insurance is a violation of the law, but it's cheaper for you to violate the law and pay the fine than to buy insurance.

This is not just a hypothetical possibility. This is what doomed a number of state government initiatives similar to Obamacare. For young healthy people, with low incomes, it's cheaper to pay the fine. Many state governments tried to do what Romney tried in Massachusetts (and Dukakis tried before Romney). They all failed. A lot of Democrats refuse to recognize this point, but it's true. And of course the Republicans have no plausible alternative.

If you want to save money, and cover everybody, it's far better to go with the single-payer plan (= Canada). The US healthcare "system" costs nearly twice as much per capita as the Canadian system, yet there are 50 million Americans without health insurance. The biggest single difference between the US system and the Canadian system is the role of private insurance companies. The insurance companies are eliminated from healthcare in Canada.The Obama plan was rammed down the throat of Congress with the support of the biggest insurance companies. That's a fact that is now officially admitted (though it was denied at the time).

the state governments cannot compel anybody to buy auto insurance. You can drive around without it or you may choose to not even buy a car. Saying you can't drive without car insurance is like saying somebody can't drive with a suspended license...they can.

Secondly, Obamacare is going to be about the power of the government to regulate inactivity. The court is going to decide if the government can punish your for....doing nothing. It is pretty amazing, I know which side I am on.

@Jbowers

once again you assert a false premise. Going to the emergency room without health insurance is no different than you or I getting cancer, we'd both be freeriders because the money we've paid into our health plans would amount to nothing compared to the cancer treatment costs.

Jaybird,The gummint can indeed punish you for doing nothing. There are laws against loitering. There are laws against allowing noxious weeds to grow unmolested on your property. There are laws against allowing your grass to get too long. And so on and son. If they ever pass a law against not thinking, you are in trouble.

As to the case, I think the interstate commerce clause ought to apply here. An uninsured person falling ill outside his native state is forcing the hospitals that state to pick up his medical tab. However, if the law is struck down, it will eventually spell the end for private insurance. It will show that a single-payer plan is the only way to avoid bankrupting the country.

A ray - some libertarians argue that hospitals shouldn't be required to do emergency room treatment for all. People should carry proof of coverage with them or maybe a bracelet if they're unconscious. Why they think that's a better system is unclear.

To be fair, some might not think it's more convenient, but believe it respects the rights of people who run hospitals.

John - Obamacare seems to be approaching the Swiss system, tightly regulated private insurance. It beats a stick in the eye, and seems to be working in Massachussetts. Obamacare also allows states to choose a single payer option, and Vermont has indicated it will do so. So we'll find out how well that works.

Brian,There is a difference between a profession and a calling. Health care falls into the latter category. There is the small matter of an oath to contend with.

Now these glibertarians taking this position, would these be the same ones who think businessmen were the heros of Atlas Shrugged? I would expect that the proportion of libertarians who have actually read Rand cover to cover would equate roughly to the same percentage of xtians who have actually read the Bible or communists who have actually read Das Kapital.

Jay, while "can" and "can legally" are indeed different things, as you point out, it muddies the water and is a petty distraction.

The operational definition here of either is "can without penalty." From personal experience, one cannot drive a car on a suspended license without penalty (once one is caught).

Eventually, it comes to the attention of the authorities, when the penalty is applied.

Today, they will determine whether the mandate is indeed a penalty for inaction or essentially an equally-applied tax with a deduction for action. In the former, your perspective is perhaps valid. In the latter, your stated perspective is not.

Finally, it is not a false premise to assert there is a difference between the uninsured going to the emergency room and the insured getting cancer. In the one case, the uninsured is being forceably paid for by all of the residents of that area in the form of higher costs for care, while in the latter, the pool of insured cover the insurance company's costs, the patient pays their deductibles, and (in some tragic cases) a bankruptcy court winds up doling out the remaining fees that are not covered by the patient, their insurance, or charities, when eventually the hospital eats those costs and passes them on to the community in the form of higher costs. For some, it is a semantic argument, but there is a legitimate difference that is pertinent to this discussion.

Further, as goes the argument, preventive care has links to reduced rates of cancer, so the person with effective insurance that they use for preventive care should lead to fewer incidences of cancer AND keeps those people from visiting the emergency rooms except in cases of... well... emergencies.

The PNHP website has some very useful information. Over the past two decades, legislation similar to Obamacare have been tried at the state level. Got to www.nphp.org and look for research finding #13 Alternative proposals for "universal coverage" do not work. State health reforms over he past two decades have failed to reduce the number of uninsured. Read the PDF entitled "State Health Reform flatlines".

This type of program has been tried and failed in Massachusetts (twice, first under Dukakis and later under Romney), and also Vermont, California, Oregon, Tennessee, Minnesota, Washington State, and Maine. It has been tried in eight states. In every case, it was trumpeted as providing universal coverage, but it failed to make big dent in the number of uninsured.

Why not? Lack of cost controls. Only a single-payer (Canadian) plan would provide enough savings in the bureaucracy to afford universal healthcare.

Lindorf thinks one step ahead and believes he's being strategic. He's not going to like the effect of balkanizing the US by constraining the Commerce Clause.

As for NPHP, Research finding #13 doesn't cover the effect of the Mass. 2006 reforms since it was only published in 2008.

More generally, the my way or the highway attitude of some on the left nearly killed health care reform and played an assist in killing climate legislation. The only consolation is that the right is getting even worse on making this type of litmus test.

"The gummint can indeed punish you for doing nothing. There are laws against loitering. There are laws against allowing noxious weeds to grow unmolested on your property. There are laws against allowing your grass to get too long. And so on and son. If they ever pass a law against not thinking, you are in trouble."

Loitering and the growth of vegetation are activities, other than that nice point, A+.

Secondly, becoming a doctor being a "calling" is your own stupid opinion. Most med school graduates get out of school with $250,000 dollars in debt. If anything, doctors should be making even more money.

Jay, US citizens pay more than twice (through insurance) that paid by UK citizens (via taxation) for healthcare. According to the OECD, the UK come top of the list for access to healthcare while the US comes bottom. Your healthcare system is just deeply, deeply, deeply messed up. Now we have a bunch of muppets in power here who are trying to bring us to your system. They are so screwed. Labour will be in power for twenty years come the next election.

Ya know, I suspect darkly I know what the conservative side on the court is going to do. They're going to overturn the original case that allowed federal crop production controls -- which told a farmer he couldn't go over the limit for planting wheat for his own consumption because that would mean he'd buy less on the market.

It's was at the time a market price protection program. It's now the basis of conservation, limiting how much can be extracted locally (because one can pick any single spot and extract til there's nothing left but gravel, if not constrained somehow).

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Eli Rabett

Eli Rabett is a not quite failed professorial techno-bunny, a chair election from retirement, at a wanna be research university that has a lot to be proud of but has swallowed the Kool-Aid. The students are naive but great and the administrators vary day-to-day between homicidal and delusional. His colleagues are smart, but they have a curious inability to see the holes that they dig for themselves. Prof. Rabett is thankful that they occasionally heed his pointing out the implications of the various enthusiasms that rattle around the department and school. Ms. Rabett is thankful that Prof. Rabett occasionally heeds her pointing out that he is nuts.